Criminal Justice News

Thursday, July 05, 2012

Massachusetts Man Pleads Guilty to $6.9 Million Fraud Scheme

ALEXANDRIA, VA—James W. Massaro, 70, of
Boxford, Massachusetts, pled guilty today to engaging in a fraudulent foreign
investment scheme that defrauded at least 20 victims of more than $6.9 million.

Neil H. MacBride, United States Attorney
for the Eastern District of Virginia; James W. McJunkin, Assistant Director in
Charge of the FBI’s Washington Field Office; and Daniel Cortez, Inspector in
Charge of the Washington Division of the United States Postal Inspection
Service, made the announcement after the plea was accepted by United States
District Judge Leonie M. Brinkema.

Massaro pled guilty to one count of
conspiracy to commit wire fraud. He faces a maximum penalty of 20 years in
prison when he is sentenced on September 21, 2012.

According to a statement of facts filed
with his plea agreement, Massaro claimed to be the president of a business
called Tracten Corporation, and he admitted that from September 2005 through
April 2008, he conspired with others to engage in a fraudulent scheme that
required investors to pay a fee that would be used to secure large letters of
credit through European financial institutions. Investors were told the initial
payment was a commitment fee necessary to secure a multi-million-dollar letter
of credit and that they would receive a percentage monthly return on the total
amount of the letter of credit. Each investor entered into an escrow agreement
with Tracten, which stated that the fee would be wired to an escrow attorney,
who would, in turn, disburse the fee to Tracten after the escrow attorney
received a commitment letter from the foreign bank on behalf of the investor.

Massaro admitted that in 2005, he and
another co-conspirator made multiple trips to Rome, Italy, to meet with bank
officials to pitch the letter of credit program. Despite the bank’s refusal to
participate, the conspirators secured an Internet domain name to set up an
e-mail account that would appear to come from a bank representative and created
fraudulent bank letterhead that also appeared to come from the bank. Massaro
and others used the e-mail account and letterhead to forge commitment letters
purporting to be from bank officials that would be provided to escrow
attorneys. Pursuant to the escrow agreement, the escrow attorneys relied on
these fraudulent commitment letters to disburse the fees to Massaro.

According to the plea agreement, Massaro
defrauded at least 20 investors who had together paid $6,936,985 in fees as
part of the letter of commitment investment program.

The investigation was conducted by FBI’s
Washington Field Office and the U.S. Postal Inspection Service’s Washington
Division. Assistant U.S. Attorneys Timothy D. Belevetz and Charles F. Connolly
are prosecuting the case on behalf of the United States.